Mr. JOHN MILLAR (Qu'Appelle):
times the good things of life are close to our hands. As we are engaged in trying to find a remedy for the existing banking troubles
Home Bank Investigation
my good friend the member for Macdonald (Mr. Lovie) hands to me a newspaper clipping advocating a remedy which, however, I think would be very far-reaching. The clipping in question, which is from the Brandon Sun says:
There are few bank failures in China. When a bank fails there the official responsible is beheaded.
I wish to refer very briefly to the resolution before the House. There were $225,000 of deposits in the Home Bank in the district I have the honour to represent. Now, I do not wish to claim that because some of the people of my constituency have had bad crops, or are poor, or have suffered greatly, or have lost all they had, through this bank failure, that that is any reason why we should act regardless of justice and set a precedent that would be dangerous. I do maintain, however, that it is a reason why we should be very careful to give these sufferers justice to the extent of one hundred per cent. I have received many letters from Home Bank depositors, and also petitions some of them containing over one hundred signatures, asking that consideration be given to the depositors, and that the government undertake to make good their entire loss. As yet I have an open mind on the subject, although I am free to admit that my heart is with the losers. I have heard it stated that a member who had branches of the Home Bank in his own constituency is not competent to act impartially. I do not admit that would be true of myself, and yet my sympathies are strongly with those who were depositors and shareholders and have lost everything they had. I might just refer to the case of one depositor, a man who was hard working, who had a little more funds and a little more backing financially perhaps than most of the other depositors
9 p.m. and yet who earned his money laboriously. He placed in one of these branches, a few days before it closed its doors, $7,000, the return from his last year's crop. Perhaps he is not so much to be pitied as some others who had not t'he $7,000 to deposit, and yet it seems very hard indeed that a man should, within a few days of the failure of this bank, place in trust $7,000 hard-earned money, when those who are collecting this money in this way look upon it not as a sacred trust to be invested where the security is only of the very best, but rather look upon it as an unlimited fund with which to engage in wild-cat schemes, and that is the way it is treated. Our Bank Act I believe is a good act, but it certainly has its weak-
nesses. This I think has been amply shown. I think if we had some measures of protection such as they have in the United States it would be an improvement. They have found in that country that a reserve fund bank is very useful-a bank to which other banks can resort in case they require funds, where they can have their paper discounted. Those who have studied the banks of the United States carefully believe that at one time there would have been a serious crash if it had not been for the federal reserve bank; but through the efforts of that federal reserve bank other banks that were in financial difficulties, not because they were insolvent but because of pressure at the moment, were able to resort to that bank and have their paper rediscounted; and thus were able to carry on. I fancy that if we had some scheme similar to the federal reserve bank of the United States, by which somebody would be appointed who would be able to arrange a rediscount, a bank in Canada would not find it necessary to close its doors in case of financial pressure. One difficulty with our banks in the past has been that when times were good they were too ready to loan, they had plenty of money, the depositors were numerous and the borrowers few. Then when times became bad, those who had plenty of security and who had a right to expect that they would be able to borrow money, and those who would receive money under a proper banking system were not able to obtain that accommodation. I have known men to go out with Victory bonds of considerable amounts and find themselves unable to borrow one dollar on them. That state of affairs should not exist. It has been said that even in the United States where they have government inspection, banks fail. It is true that such things occur; and yet I am inclined to think that a proper inspection by the government-not such an audit as we have had in the past, which seems to me to have been entirely ineffective, but an inspection that would examine very carefully the reports from the various banks, and have a nose for trouble the same as a newspaper man has for news-would have discovered something wrong with the returns from the bank which has caused us so much trouble. If such banks as these were inspected more carefully, and the loans the bank had made examined thoroughly, such a disaster as has occurred would not be repeated. I am inclined to think the banks are standing in their own light. This failure has shattered confidence in our banking system, and, I think the banks by standing together, by not adopting such measures
Home Bank Investigation
as will prevent such a catastrophe as this, have done themselves a very great deal of harm. It seems to me the claims of the depositors rest to a very large extent on this point: It is claimed by some that Sir Thomas White, when Minister of Finance, being notified of the condition in which this bank stood, withheld his hand in the interests of the public good, and that Canada at large benefited thereby. I think, if that be proven, I have found a very strong claim and a very good reason why the country at large should bear the loss. I am watching these matters very carefully. I hope the investigation will be thorough. I am glad that it extends from the time the bank was created up to the time it closed its doors.
I would like to refer to a remark made by the mover of the resolution (Mr. Irvine), that I think, was rather unfortunate. I feel that I cannot let it pass without a reference. It was to the effect that the commissioners usually write reports that nobody reads, run up large bills of expense, and that their reports are very seldom translated into legislation. I think if the hon. member (Mr. Irvine) had thought seriously he surely would not have made that statement. I have gone back carefully in my memory over the commissions I have known, and of the men who have been employed on these commissions, and I can find no justification for any such statement. A clipping was read from a newspaper, supposed to be a statement from a newspaper reporter, to the effect that having sat three years in the gallery he knew of no case where the report of the commission had been translated into legislation. I have in mind at present such men as are working on these commissions even now, and coming from Winnipeg, on my way to Ottawa a short time ago, I met the Grain Commission, and when I saw these men and talked with them I found they had just returned from Fort William and Port Arthur, and I can well say that their solicitor was worked to the last pound of his strength. He had done all that any man could possibly do. He is a man of great ability and high attainments. Surely such ridicule should not be heaped upon such men as Chief Justice Turgeon, such men as Dean Rutherford or Mr. Scott of Winnipeg, or such men as Professor Gibbon. These are not men of the stamp that are wasting their time and public money writing reports that nobody reads. I can assure the hon. member for East Calgary that there are men all over the country who are deeply interested in this matter of the grain trade, and they will read with the greatest care the reports that
have been issued. It may be-and I believe it is the case-that three-fourths of the people are not interested in that matter and do not read the reports. Why should those who are interested be deprived of the benefit of the reports because some people will not read them? I desire to refer to two or three commissions of which I have actual knowledge. How did we get the co-operative elevator companies? It was because the report of the commission was translated into legislation. The Royal Grain Commission of 1906 and 1907 made twenty-six recommendations, and twenty-four of these recommendations were accepted by the organized farmers of western Canada, and were incorporated into the Canada Grain Act of to-day. I am asked, do we get any results? Let me read to the House two or three paragraphs which will be good reading at any time in this connection or in any other connection. I read from the Regina Leader of April 27, 1910:
In the matter of the Port Arthur elevator and the Empire elevator, the charges were taken up and on investigation were all sustained and the department at Ottawa instructed their counsel here to prosecute and the case came up befoi'e Police Magistrate Daly on Friday, April, 1923. The Port Arthur elevator was proven guilty on five charges of false statement and fined $500 for each offence. The Empire elevator was found guilty on six charges of a similar character and fined $500 for each offence.
Just one other short paragraph, because I have heard many slurs cast on the work of commissions from time to time, therefore, I dwell for a moment on this question. A question was asked as to the result of the Grain Commission. Let me read two or three lines from a clipping from the Farmers' Advocate of November 17, 1909. This shows the result of measures put into effect on the strength of the report of that commission:
In 1908, the shortage on out-turns totalled 50,000 bushels, a loss of course which indirectly affected the price paid for grain at Fort William.
I will now give the returns after the remedial measures were put into effect.
Bill of Net
Lading Out-turn shortage
Bushels Bushels Bushels
8,470,287 8,463,925 5,956Oats
2,377,311 2,375,096 2,214
I think that is as far as I need to go in regard to this matter. When commissions are working hard on very important work and are doing as faithful and honest service as members of this House, it is a grave mistake to undermine their work, to leave the impression that it is useless, that their report will not be translated into legislation. Let me close by asking this question: Does any member amongst the 235 in this House be-
Home Bank Investigation
lieve for one moment that the report of the present Grain Commission will not be translated into legislation? I think there is not one.
I believe it will be better to refer the resolution to a committee of the House rather than to a commission; but I feel just a little undecided at the present time whether it will be better to refer it to a special committee than to the Banking and Commerce committee. I hope, however, wherever it goes, it will be dealt with in a very effective manner, so that such disastrous failures as we have had in the past will not occur in the future.